With the non-oil sector projected to grow by 5.8%, the Kingdom is laying firm groundwork for sustained investment, innovation, and expansion across key sectors.
Despite global economic headwinds, Riyadh is leading the charge with strong performance in offices, residential, hospitality, and retail. Grade A office buildings in the capital recorded a record-low vacancy rate of just 0.2% in Q4 2024, with average rents soaring to $609 per sq. metre. A significant 888,600 sq. metres of office space is set to enter the market in 2025, ensuring continued momentum.
Meanwhile, Jeddah is emerging as a rising hub, attracting regional and global corporations with high-quality office developments. Dammam’s office market remains stable, buoyed by government demand.
Riyadh’s residential market remains hot, with villas accounting for 53.3% of all transactions. While 28,943 units are planned for 2025, limited supply is expected to drive up prices and rents. In Jeddah, apartments dominate upcoming supply—82.8% of total units—but face similar supply-demand pressures.
Riyadh’s hospitality sector is booming, with Average Daily Rates (ADR) rising 13.3% to $239 in 2024. The city is expected to add 2,312 keys in 2025. Jeddah continues to thrive on religious and leisure tourism, maintaining a solid base for future growth.
Traditional malls are losing ground as experiential retail formats—like open-air boulevards—gain traction. Community malls in Riyadh saw 5.5% leasing growth, while regional malls declined by 9.3%. Jeddah mirrors this trend, pushing developers to rethink tenant mixes and designs to meet evolving customer preferences.
The industrial and logistics sectors in Riyadh and Jeddah are benefiting from economic diversification and the e-commerce boom, with upward pressure on rental rates. At the same time, Saudi Arabia’s data centre footprint is rapidly expanding, powered by 5G and AI adoption. The Kingdom contributed 12.6% of the MEA region’s 1,050 MW operational IT load by end-2024, ranking third in active colocation facilities.
According to Saud Alsulaimani, JLL KSA Country Head, Vision 2030 is “a significant catalyst for real estate development,” attracting capital and supporting tourism, infrastructure, and logistics growth. With $29.5 billion in construction project awards and ongoing investments in sustainability, digital transformation, and regulatory reforms, Saudi Arabia is well-positioned to meet future demand, even amid rising construction costs and geopolitical pressures.
